Many credit unions and small financial institutions have experienced an increase in membership in recent years. The current economic environment in the U.S. has encouraged many individuals to become disillusioned with large banks. As a result, many are turning to smaller organizations that provide a variety of unique services, such as self-service coin counting machines or more personalized financial advice.
According to Politico, credit unions and large banks have been increasingly at odds ever since the Great Recession rattled the U.S. economy in 2007. Now, as Congress debates potential reforms to the federal tax code, which may include eliminating a long-standing exemption for credit unions that provide services for underserved individuals, the differences are even clearer. Large financial institution such as JPMorgan Chase and Wells Fargo want to eliminate the exemption, Politico said. But credit unions are fighting to preserve the rule. At the same time, these smaller organizations are leveraging the fight to differentiate themselves as well-meaning institutions that prioritize serving the public.
Nationwide membership growth
Across the country, many credit unions are enrolling more members than ever before. In fact, Sioux Falls Business Journal, a newspaper based in Sioux Falls, S.D., said the city's six credit unions have a collective membership of 73,939 individuals. According to the publication, those numbers have grown substantially in recent years, with 378 new members enrolling in 2012. Sioux Falls Federal Credit Union, the largest institution in the area, currently has 27,000 total members.
Part of this growth comes from the fact that small credit unions offer a variety of unique services to their members. In other cases, membership has grown because of an increase in anti-big-bank sentiment among the public. Boulder County Business Report, a news publication based in Boulder, Colo., said Elevations Credit Union, a local institution, experienced a 4.1 percent uptick in membership in 2012. This year alone, bank transfer initiatives, in which customers of larger financial institutions switch to credit unions, have already resulted in a 3.5 percent increase in membership.
Americans place a high value on the ability for credit unions to offer a variety of useful services. In addition to in-person consultations or more accessible loan programs, these institutions can also invest in coin counting machines to satisfy the needs of members who simply want to turn their spare change into cash.
October 31, 2013